Exelixis Q2 Revenue Falls 11 Percent

Core Insights - Exelixis reported Q2 2025 results with non-GAAP EPS of $0.75, exceeding analyst expectations of $0.66, while GAAP revenue of $568.3 million fell short of the $580.05 million estimate, reflecting a 10.8% year-over-year decline primarily due to the absence of a $150 million milestone payment from Q2 2024 [1][2][6] Financial Performance - Non-GAAP EPS was $0.75, down 10.7% from $0.84 in Q2 2024 [2] - GAAP EPS was $0.65, down 15.6% from $0.77 in Q2 2024 [2] - Total revenue was $568.3 million, a decrease of 10.8% from $637.2 million in Q2 2024 [2] - Net product revenue increased by 18.8% year-over-year to $520 million, driven by strong sales of CABOMETYX [2][5] - Collaboration revenue fell to $48.2 million from $199.6 million, a 75.8% decline due to the lack of milestone payments [2][6] Business Model and Strategy - Exelixis focuses on developing targeted small-molecule therapies for cancer, with CABOMETYX as its core product for various cancers [3] - The company aims to diversify its portfolio beyond cabozantinib through strategic partnerships and a robust development pipeline [4] Product Sales and Market Position - CABOMETYX sales accounted for the majority of net product revenue, with $517.9 million from CABOMETYX and $2.1 million from COMETRIQ [5] - The new indication for neuroendocrine tumors now represents about 4% of CABOMETYX's business, with rapid launch efforts following U.S. approval in March 2025 [5][11] Clinical Development and Pipeline - Zanzalintinib showed promising results in the Phase 3 STELLAR-303 trial for colorectal cancer, with a regulatory submission planned [9] - The company is focusing on high-potential projects, having discontinued weaker assets [9][10] Regulatory and Competitive Landscape - Recent approvals for CABOMETYX in neuroendocrine tumors expand market opportunities, although financial contributions will take time to materialize [11] - CABOMETYX remains a leading TKI in renal cell carcinoma, but faces competition from generics in neuroendocrine tumors [12] Future Guidance - Management maintains FY2025 revenue guidance of $2.25 billion to $2.35 billion, with net product revenue expected between $2.05 billion and $2.15 billion [14] - The company will continue to evaluate guidance based on the performance of the NET launch and other new indications [14][15]